Last Updated on Apr 7, 2020 by James W
If you are an entrepreneur, you are probably implementing your own personal-finance management. Perhaps, you are looking for the best low interest rate credit cards for business in order to save more money. You can also reduce your debt and focus on increasing your revenues. In addition, you can manage your cash flow by determining your immediate priorities and setting aside some less important expenses.
There are many ways you can manage your personal finances. The problem is that most of the steps we follow do not work. There are many factors why many entrepreneurs are unable to manage their personal finances.
If you also go through the same problem, you might be asking yourself where you have gone wrong. It’s difficult to judge your situation, but we can learn more from prominent people like Warren Buffet.
Warren Buffett is one of the wealthiest people across the world, so his personal-finance tips are quite credible. Nevertheless, there are many famous quotes from him which you can apply in your personal-finance management.
Today, we will be going over personal-finance tips from this successful billionaire. Let’s get started!
- “Risk comes from not knowing what you’re doing.”
For Warren Buffet, knowledge is the reason why you should invest in something. This means you know the opportunity and how you can take advantage of it.
Losses take place as a result of ignorance. This is why Warren Buffett keeps on learning not only about investing, but also about life in general. Do not invest in something you don’t know anything about.
- “Cash … is to a business as oxygen is to an individual: never thought about when it is present, the only thing in mind when it is absent.”
Warren Buffett suggests that you should have an emergency fund and available cash all the time. In business, you will never know what’s going to happen next.
Stock market crashes happen without any clue. If you’re caught empty-handed, you’ll go bankrupt.
- “Price is what you pay; value is what you get.”
If you are investing in stocks, don’t buy when you think the price is low based on the present chart. You should look for the book value of the stock you are buying.
If the price is lower than its book value, it’s an ideal stock to buy. This is because when companies go bankrupt, shareholders will be paid back according to their book value.
- “Only buy something that you’d be perfectly happy to hold if the market shut down for 10 years.”
Warren Buffet warns about buying stocks, which have no significance for you. You should buy stocks as though this will be your business for the next 10 years, so that you won’t have any regret.
- “Someone’s sitting in the shade today because someone planted a tree a long time ago”
Always think of the future. Thinking of present-day opportunities are important, but keep the long-term in mind.
Look for something that will give birth to more opportunities in the future. Keeping in mind that investing is like farming in which it takes time to reap a profit.
Success in business depends on how you manage it and not on what you have. Some people think that the larger your capital, the quicker your business grows. This is partially true as it helps, but this is not the only way to become a prosperous entrepreneur.
Most successful entrepreneurs started small, but they have been effective in managing their personal-finance, so they could pass these principles onto their businesses.